Knowing the differences between debit and credit cards is important to get the best out of both. As popular cashless payment methods, debit and credit cards are used by individuals and businesses alike.
In this article, we take a closer look at the differences between these two types of cards. You’ll also find out what to look out for when choosing a debit card and how to make the most of their benefits.
What are credit and debit cards?
Both debit and credit cards are issued by banks or financial institutions, but they work very differently.
With a debit card, you can make cashless payments by withdrawing money directly from your savings or checking account. For example, when you purchase with a debit card, the money is immediately deducted from your bank account. Some examples of debit cards in Indonesia are Mandiri Debit, BCA Debit and BNI Taplus.
A credit card, on the other hand, allows you to borrow money up to a certain limit set by the card issuer. When you purchase with a credit card, you are basically borrowing money from the bank, which you have to pay back by a certain due date. Examples of credit cards in Indonesia are Mandiri Platinum, BCA Mastercard Platinum and BRI Visa Signature.
How do you use debit and credit cards?
The use of both cards is quite similar. When you make a payment, the merchant or cashier inserts your card into an electronic data capture (EDC) device. Regardless of whether it’s a debit or credit card, you will need to enter your personal identification number (PIN) to complete the transaction.
With today’s technology, both debit and credit cards can also be used for online purchases on platforms such as e-commerce websites. In this case, you simply enter your card number in the payment section, followed by your PIN or Card Verification Value (CVV) code to complete the transaction.
6 main differences between debit and credit cards
Although debit and credit cards may look similar at first glance, there are significant differences that you should be aware of.
1. Source of the money
The main difference is where the money comes from. When you use a debit card, the money is withdrawn directly from your bank account. As long as you have sufficient funds, you can make payments.
With a credit card, the money comes as a loan from the bank. The bank provides you with a credit line so that you can borrow money now and pay it back later.
2. Cash withdrawals and money transfer
Both cards can be used for cashless payments at merchants that accept them. However, with a debit card you can withdraw cash from ATMs and transfer money to other accounts, whereas this is not possible with a credit card.
You can also withdraw cash from an ATM with a credit card, but there are fees involved as you are "borrowing" money from the bank. In addition, you cannot transfer money from credit cards to other accounts.
3. Card ownership
Debit cards are issued to bank account holders when they open a savings account. The process is relatively simple, you just need to provide proof of identity and deposit a minimum amount.
Credit cards, on the other hand, are issued to people who apply for them and meet certain criteria, such as income level. You do not need to have a bank account with the issuing bank to apply for a credit card. However, the process of applying for a credit card is more complicated and requires additional documentation such as tax statements and payslips.
4. Benefits for the holders
Both types of cards come with benefits, but credit card holders often enjoy more advantages. In addition to discounts and special offers at certain merchants, credit card holders can also earn rewards points and even gain access to exclusive airport lounges.
5. Spending limits
Credit cards have a spending limit set by the issuing bank, which varies depending on the card and your financial profile.
For example, according to Bank Indonesia's regulations, individuals with a monthly income between Rp3 million and Rp10 million can have up to two credit cards, with the total credit limit not exceeding three times the monthly income. However, those with higher incomes may be given limits based on risk assessments.
Debit cards, on the other hand, have no spending limits as they are withdrawn directly from the user’s bank balance.
6. Charges
Debit cards generally have fees for printing the card, inter-bank transfers and monthly maintenance. Credit cards, on the other hand, may incur annual fees, billing fees and interest on arrears.
Important factors for choosing the right card for your business
Debit and credit cards also play an important role in business life. For example, businesses can use credit cards to make purchases when cash flow is tight, while debit cards provide instant access to company funds.
But which card should you choose for your business? Here are a few important factors you should consider:
1. Financial needs and goals
Consider the financial needs and goals of your business. If you want to avoid debt, a debit card is a better choice because it helps you manage your budget and avoid overspending.
However, if your goal is to build a credit history for future loans, using a credit card regularly and paying bills on time can improve your business’s credit score.
2. Cash flow
Your business’s cash flow also plays a role in deciding between a debit or credit card. If your cash flow is tight and you need to defer payments, a credit card can help smooth out cash flow fluctuations.
On the other hand, if you have a strong cash flow and want to manage your budget more efficiently, a debit card is the right choice. Debit transactions are instant and help track spending in real time.
3. Fees and interest rates
Always be aware of the fees and interest rates associated with each type of card. Debit cards typically have lower fees, such as monthly maintenance fees, but credit cards may have higher annual fees and interest rates on borrowed money.
Also, with credit cards, pay attention to interest rates, late fees and fees for cash withdrawals.
4. Perks and benefits
Finally, you should also consider the perks and benefits offered by the card provider. If the benefits outweigh the fees, it may be worth choosing a credit card with more benefits, such as travel discounts, cashback or points.
Tips for making the most of debit and credit cards for businesses
Managing business expenses with debit and credit cards requires careful planning. Here are some tips on how to get the most out of them:
1. Choose the right cards
Choose cards that offer the best features and benefits for your business. For example, if your employees travel frequently, opt for cards that provide travel insurance.
Compare the fees and interest rates of different providers to make sure you get the best deal.
2. Set budget limits
Set a spending limit for each card to control spending and avoid overspending. Accounting software can help you compare your spending to your budget.
3. Monitor transactions regularly
It is important that you monitor all card transactions regularly. Perform transaction reconciliations and regular internal audits to make sure everything is correct and in order.
4. Inform your employees
Train your employees to use company cards responsibly. Issue clear guidelines on spending limits, security protocols and proper card use.
Use Aspire Corporate Cards to support your business growth
Looking for a smarter way to manage your company’s spending? Just use Aspire corporate cards, the corporate cards with the most benefits in Indonesia!
Make transactions with Aspire corporate cards and earn 0.3% unlimited cashback on a variety of business payments and use the worldwide Mastercard network for services such as SaaS, business transactions, travel and digital marketing.
With real-time spending control via Aspire’s app, you can manage your spending more effectively and get a complete overview of your company’s financial activities. Aspire’s all-in-one platform helps you save time and reduce costs.
Want to know how Aspire can take your business to the next level? Contact our team today!
Frequently Asked Questions
How can Aspire support the unique financial needs and challenges of mid-sized businesses?
Aspire offers a comprehensive suite of expense management solutions tailored for mid-market companies. This includes sophisticated corporate cards, advanced budget controls, and streamlined claims and approval policies, all designed to enhance financial efficiency.

How quickly can a mid-market company integrate Aspire's solutions into existing systems and workflows?
Integration with Aspire's expense management solutions is swift and seamless. Mid-market companies can swiftly implement corporate cards with tailored features, set up nuanced budgets, and establish streamlined claims and approval processes, ensuring minimal disruption to existing workflows.

How does Aspire compare to competitors for international money transfers?
Aspire excels in international expense management with FX fees up to 2x cheaper than traditional banks.
Global payments are offered by various providers through business accounts. Read our article to know more about types of business accounts and how to choose the best one for your business. There are many banks and fintech companies offering business accounts to businesses in Singapore. We have covered them all in our blog, you can click the links to view accounts offered by various banks such as DBS, OCBC, Maybank etc.
However, if you are a start-up or a growing business, chances are you may not meet the eligibility criteria for most of these banks or find their charges to be expensive for your liking. You can consider opting for Aspire multi-currency account for global payments which offers you all the benefits, with eligibility criteria which are less stringent. Read our article on bank charges in Singapore for a quick and easy comparison.

What level of customization does Aspire offer to meet the specific financial requirements of mid-market clients?
Aspire understands the diverse financial needs of mid-market clients and provides a high level of customization to tailor solutions accordingly. This includes the ability to customize corporate cards with specific spending limits, rewards, and benefits that align with the unique requirements of each client.
Additionally, Aspire's budgeting features are adaptable to accommodate the distinct financial structures of mid-market enterprises. The platform also allows for fine-tuning approval policies, ensuring they align with the specific workflows and compliance standards of individual mid-market businesses. This commitment to customization empowers mid-market clients to optimize their expense management in a way that best suits their financial goals and operational preferences.

Is there a minimum balance required for Aspire Business Accounts?
No minimum balance is required to keep your SGD, USD, EUR, GBP and IDR Accounts activated.

Can Aspire's corporate cards be customized to cater to the specific needs of consulting teams on the go?
Yes, Aspire's corporate cards are highly customizable. Consulting teams can benefit from tailored spending limits, travel-centric perks, and real-time transaction tracking, ensuring that the cards meet the unique requirements of professionals on the move.

How does Aspire support budget management for consulting projects and travel expenses?
Aspire's platform offers sophisticated budget controls that consulting companies can adapt to project-specific needs. This includes setting project budgets, tracking expenditures, and receiving real-time insights to ensure that expenses align with project goals.

What are Aspire Corporate Card FX rates?
At Aspire, we want you to pay the lowest rates in the market.
- Zero card activation fees
- Zero card transaction fees
- Best FX rates, up to 2x cheaper than banks

How does Aspire help consulting companies enforce expense policies and approvals for travel expenses?
Aspire streamlines the claims and approval process, allowing consulting companies to establish and enforce expense policies seamlessly. Customizable approval workflows ensure compliance with company policies and industry regulations.

Is Aspire's platform scalable for consulting companies of varying sizes?
Yes, Aspire's platform is scalable and caters to consulting companies of all sizes. Whether you're a boutique consultancy or a larger firm, the platform's features can be adapted to meet your specific travel and expense management needs.

How can I open a business account in Singapore?
For a business account in Singapore, Aspire is an excellent choice. With a focus on startup and SME needs, Aspire offers a seamless and transparent banking experience.
Benefit from their user-friendly online platform, no minimum balance or account opening fees, and dedicated support for businesses of all sizes.
Aspire is designed to streamline your financial management, making it an ideal partner for entrepreneurs in Singapore.

How long does it take to open an Aspire business account?
Registration with Aspire takes less than 10 minutes which you can do via our website or mobile app.
Once registered, we will get back to you within 5 business days on whether your account has been activated or if we need further documents from you.
Our account verification process varies according to the nature of your business. In exceptional cases, it can take up to 7 days to process your documents.

How can Aspire's corporate cards benefit my startup?
Aspire's corporate cards offer a range of benefits for your startup. Earn 1% unlimited cashback on qualified spends, simplify expense management, enjoy streamlined transactions, and gain real-time insights into spending. With customizable limits, integration with accounting software, and enhanced security features, Aspire's corporate cards are designed to empower your startup's financial efficiency and provide added convenience for your team.

Is Aspire suitable for both early-stage and established startups?
Absolutely, Aspire caters to the needs of both early-stage and established startups. Whether you're just beginning your entrepreneurial journey or have an established business, Aspire offers tailored financial solutions to help streamline your operations.
From managing expenses and optimizing workflows to providing valuable financial insights, Aspire's platform is designed to adapt and scale with your business as it grows. The flexibility and scalability of Aspire make it a suitable choice for startups at various stages of development.

Is there a minimum balance required for Aspire Business Accounts?
No minimum balance is required to keep your SGD, USD and IDR* Accounts activated.
However, we recommend keeping your subscription plan amount available on your balance to ensure you're up to date with your payment every month.*
To create a recipient or make any transaction on your IDR Account, you'll need to have a minimum balance of IDR 10,000 on your account.
